Contribution Payslip

1

Hi, regarding payslip contributions, in our country the payslip normally deducts contributions before arriving at the net pay. Is there any way to work around this?

2

Hi @neobks91,

That means that it’s not really a Contribution, but rather a Deduction that’s being called a contribution for one reason or another.

A contribution is when the employer pays – on behalf of its employee – an amount to an external party. This amount by definition is not deductible.

If it is deductible like your case, you should create a Payslip Deduction Item.

3

Hi, yes, the employer pays on behalf of the employee. In Malaysia, this is called EPF(KWSP) , SOCSO, and EIS. However, these fall under liabilities and payslip deductions doesn’t show this.

Below are some examples

IMG_6245
IMG_6245770Ă—530 55.6 KB

4

@neobks91, there seems to be a confusion here, the net amount in the payslip should equal the amount transferred to the employee account for this month.

But I think I understand your situation more clearly now.

You see your EPF scheme is a shared benefit scheme where both the employer and the employee pay towards this benefit plan:

  • The part payable by the employer (Employer EPF) goes to → Payslip Contribution Item
  • The part deductible from the employee (EPF) goes to → Payslip Deduction Item

Note that in the picture you provided there are two of each of the following, some with different amounts:

  • EPF & Employer EPF
  • SOCSO & Employer SOCSO
  • EIS → I assume that this plan is 100% deductible from Employee, based on the picture above.

All of these have two components:

  1. A component to calculate how much is to be paid by the Employer to a 3rd Pary → This is a Payslip Contribution Item, that is not part of your net pay. Note that all the contribution amounts (598.00, 69.05 & 7.90) are listed after the “End Month Pay” total.

  2. Another component to account for the amount to be paid by the Employee through salary deduction → This is a related but separate Payslip Deduction Item which will be deducted to arrive at your “End Month Pay”. Just to confirm this, note the column heading above EPF, SOCSO, EIS, PCB, Deduction & Zakat; the column heading says “Deduction”.

I hope I haven’t overcomplicate thing with too much detail. So I will try to summarize what need to be done in practice.

You need to define the following Payslip Deduction Items:

  1. EPF
  2. SOCSO
  3. EIS
  4. PCB
  5. Deduction
  6. Zakat

On top of that, you need to define the following Payslip Contribution Items:

  1. Employer EPF
  2. Employer SOCSO
  3. Employer EIS
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5

Now I understand. Sorry, my bad, thanks for clarifying!

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